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Employment status decision - minister of religion

A recent Court of Appeal (CA) decision has held that a Rector was not an employee or a worker for the purposes of Employment Law.

The case of Sharpe v The Bishop of Worcestor concerned a Church of England Rector, Reverend Sharpe, who sought to bring claims of constructive unfair dismissal and whistleblowing against his Bishop. In order to bring the claims, Reverend Sharpe had to show that he fell within the statutory definition of 'employee' (in respect of his claim for unfair dismissal) and 'worker' (in respect of his whistleblowing claim).

The employment judge at first instance held that Reverend Sharpe was not an employee as he did not have an express contract of employment with the Bishop and there was no necessity to imply one. However on appeal, the Employment Appeal Tribunal (EAT) concluded that the Employment Tribunal had erred in this decision. The EAT applied a recent Supreme Court case, President of the Methodist Conference v Preston, which advocated a full analysis of the employment status of a minister of religion. The EAT held that the Tribunal had too readily ruled out the existence of a consensual contractual arrangement on the basis of the Bishop's limited powers as defined by canon law and Reverend Sharpe's ability to substitute third parties to perform his duties.

Overturning this reasoning, the CA closely analysed the relationship between Reverent Sharpe and the Bishop and held that there was no contract whatsoever between them. This decision was reached on the basis that there was no negotiation between them on the terms of the appointment to amount to an express contract and because there was no need to imply a contract between them because the duties to be performed by Reverend Sharpe were incidents of his statutory office. As both 'employees' and 'workers' require the existence of a contract, Reverend Sharpe could not pursue either an unfair dismissal or whistleblowing claim.

In addition, the CA held that if a contract did exist between Reverend Sharpe and the Bishop, this was not a contract of employment. In finding that Reverend Sharpe was not an employee, the CA referred to Reverend Sharpe's high level of independence including wide scope to delegate almost all of his duties, securities of tenure and the lack of effective framework of accountability which came as part of the appointment. Rectors were free to act as they saw fit, even if this went against the wishes of the Bishop, so long as they remained within the confines of church doctrine and did not engage in personal misconduct. Further, the CA was satisfied that Reverend Sharpe could not enforce his stipend against the Bishop directly, that the Bishop had only slight powers of control over Reverend Sharpe and that these were mostly unenforceable/

Accordingly the CA held that there was no contract between the Rector and the Bishop, and that even if there was, it would not be an employment contract.

Best practice

While this judgment is concerned with the employment status of the clergy and is fact specific, it is a useful reminder to employers of the principles governing an employment relationship. In determining whether an employment contract truly exists, a tribunal will have regard to the degree of control, integration, mutuality of obligations, requirement of personal service and economic reality between the two parties. Employers are advised to ensure that when individuals are engaged the correct documentation is in place to reflect the status of their engagement.

It should be noted that the relevance of this case regarding rectors and other categories of clergy is likely to be diminished following the enactment of the Ecclesiastical Offices (Terms of Service) Measure 2009 and Ecclesiastical Offices (Terms of Service) Regulations 2009 which are premised on the assumption that ecclesiastical office holders are not employees.